India’s largest defence deal – worth $20 billion (Rs 1.25 lakh crore) – is reportedly being scrapped.
Three years ago, Dassault Aviation was in the midst of exclusive talks on a multi-billion-dollar deal to supply India with 126 planes. It was a huge boost for the France-based company, which had till then struggled to find an international buyer for Rafale, its powerful and expensive fighter planes.
But, in those three years, India never signed a formal agreement with the aviation company. The two camps, reportedly, could not agree on a price.
And on April 10 – during Indian Prime Minister Narendra Modi’s visit to France – India signed another deal to buy 36 “ready-to-fly” of the Rafale fighter jets from Dassault.
The decision to buy these 36 aircraft means that the earlier deal is more or less history.
“We will now acquire the 36 new aircrafts and based on the assessment, will then take a call on future needs,” Sitanshu Kar, principal spokesperson for the defence ministry told Quartz.
But while Kar refused to shed any more light on the future of the deal, India’s defence minister Manohar Parrikar has been less ambiguous about its fate. On April 13, he said that “a car cannot go on two tracks simultaneously” – which means the Indian government won’t do both deals.
Here is a timeline of how it unfolded:
2000: The Indian Air Force expresses interest in buying medium multi-role combat aircraft to replace Soviet-era MiG-21s. Over the years, the ageing MiG-21s have been involved in multiple accidents.
2001: The Indian Air Force issues requests for information for 126 combat jets. But there is little activity for the next six years.
2007: The Indian government issues tenders for 126 MMRCAs, for an estimated cost of Rs42,000 crore ($6.7 billion, now). The request for proposal is issued to six vendors: Russia’s MIG-35 (RAC MiG); Sweden’s JAS-39 (Saab); French Rafale (Dassault); American F-16 Falcon (Lockheed Martin); Boeing’s F/A-18 Super Hornet and Eurofighter Typhoon (made by a consortium of British, German, Spanish and Italian firms).
2008: US majors Boeing and Lockheed Martin, Russia’s United Aircraft Corporation, France’s Dassault, European consortium’s European Aeronautic Defense and Space Company (EADS) and Saab submit their bids.
2011: The defence ministry says it will start discussions with Dassault and EADS. The ministry tells American companies Boeing and Lockheed Martin that their proposals have been rejected.
2012: India shortlists Dassault, after it submits the lowest bids for the deal. According to the RFP, the winner of the contract would supply 18 of the 126 aircraft to the Indian Air Force in 36 months from its facilities, and the remaining would be produced at Hindustan Aeronautics Ltd plant in Bangalore.
2013: Negotiations continue during the year.
2014: India decides to put the deal on hold due to budgetary constraints until 2015. Dassault remains hopeful.
2015: After three years of negotiations with Dassault, Modi announces on April 10 that he has ordered 36 “ready-to-fly” Rafale fighter jets from Dassault. A day later, Parrikar indicates that the move is the right direction, and says that in future India would deal directly with the French government instead of the aviation company.
This article was originally published on qz.com.
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Three years ago, Dassault Aviation was in the midst of exclusive talks on a multi-billion-dollar deal to supply India with 126 planes. It was a huge boost for the France-based company, which had till then struggled to find an international buyer for Rafale, its powerful and expensive fighter planes.
But, in those three years, India never signed a formal agreement with the aviation company. The two camps, reportedly, could not agree on a price.
And on April 10 – during Indian Prime Minister Narendra Modi’s visit to France – India signed another deal to buy 36 “ready-to-fly” of the Rafale fighter jets from Dassault.
The decision to buy these 36 aircraft means that the earlier deal is more or less history.
“We will now acquire the 36 new aircrafts and based on the assessment, will then take a call on future needs,” Sitanshu Kar, principal spokesperson for the defence ministry told Quartz.
But while Kar refused to shed any more light on the future of the deal, India’s defence minister Manohar Parrikar has been less ambiguous about its fate. On April 13, he said that “a car cannot go on two tracks simultaneously” – which means the Indian government won’t do both deals.
Here is a timeline of how it unfolded:
2000: The Indian Air Force expresses interest in buying medium multi-role combat aircraft to replace Soviet-era MiG-21s. Over the years, the ageing MiG-21s have been involved in multiple accidents.
2001: The Indian Air Force issues requests for information for 126 combat jets. But there is little activity for the next six years.
2007: The Indian government issues tenders for 126 MMRCAs, for an estimated cost of Rs42,000 crore ($6.7 billion, now). The request for proposal is issued to six vendors: Russia’s MIG-35 (RAC MiG); Sweden’s JAS-39 (Saab); French Rafale (Dassault); American F-16 Falcon (Lockheed Martin); Boeing’s F/A-18 Super Hornet and Eurofighter Typhoon (made by a consortium of British, German, Spanish and Italian firms).
2008: US majors Boeing and Lockheed Martin, Russia’s United Aircraft Corporation, France’s Dassault, European consortium’s European Aeronautic Defense and Space Company (EADS) and Saab submit their bids.
2011: The defence ministry says it will start discussions with Dassault and EADS. The ministry tells American companies Boeing and Lockheed Martin that their proposals have been rejected.
2012: India shortlists Dassault, after it submits the lowest bids for the deal. According to the RFP, the winner of the contract would supply 18 of the 126 aircraft to the Indian Air Force in 36 months from its facilities, and the remaining would be produced at Hindustan Aeronautics Ltd plant in Bangalore.
2013: Negotiations continue during the year.
2014: India decides to put the deal on hold due to budgetary constraints until 2015. Dassault remains hopeful.
2015: After three years of negotiations with Dassault, Modi announces on April 10 that he has ordered 36 “ready-to-fly” Rafale fighter jets from Dassault. A day later, Parrikar indicates that the move is the right direction, and says that in future India would deal directly with the French government instead of the aviation company.
This article was originally published on qz.com.